In five questions or less, an industry expert defines and explains a technology, term or trend – with this installment seeing Thomas Beck, Avaloq’s Group CTO, taking on eBanking.
CBR: What is eBanking?
eBanking encompasses a wide variety of online interaction channels between a bank or wealth manager and their clients. These channels include web portals, mobile apps, instant messaging, online advisory and self-service.
CBR: What are the main differences in the services provided by eBanking vs traditional
TB: The main differences between eBanking and traditional banking are driven by constant changes in consumer behaviour. As recently as twenty years ago, many were sceptical of revealing financial data online and preferred traditional face-to-face banking.
However, as digital technology has become imbedded in our everyday lives, the majority of consumers now demand quick and easy access to their finances wherever and whenever required. eBanking has therefore become an essential offering as it provides the same tailored services as traditional banks, but in the palm of a consumer’s hand. The powerful combination of traditional and digital banking provides a continuous and personalised client experience across all channels, which is ultimately what consumers today expect.
CBR: What technological challenges do banks face in delivering eBanking?
TB: Security remains one of the key issues facing eBanking and rarely a week goes by without reports of cyber-fraud or attempted hacks. Providers will of course continue to evolve to ensure against such attacks but so does the technology used by hackers.
Security isn’t the only issue facing eBanking however as legacy technology can have a crippling impact on the success of digital banking. If the core banking system is running on servers which are coming to end-of-life and may be incompatible with the latest patches and technology updates, the ability to offer a digital experience which meets consumer expectation will undoubtedly be impacted. To truly deliver a seamless digital experience, banks must be running on the latest technology infrastructure to deal with the evolving world of financial management.
CBR: How will technologies like artificial intelligence (AI) impact eBanking?
TB: Disruptive technology such as AI could have a significant impact on eBanking. Roboadvisors, which are automated investment advisors, are already on the rise, with reports stating they will manage $2.2 trillion by 2020. Many wouldn’t have foreseen the rise of digital banks twenty years ago, yet now this is the norm. To ignore disruptive technologies could therefore see banks left behind by competitors which embrace the latest IT trends.
CBR: Will high street bank branches continue to exist as eBanking becomes more popular?
TB: I believe the future of banking will see a multi-channel approach, encompassing both digital technology and the physical store complimenting one another to offer clients a seamless experience. The significance of eBanking will continue to increase, making banking faster and more efficient while embracing the latest technology trends and consumer demands. Simultaneously, although bank branches are being reduced, there will always be demand for physical interaction, especially for wealth managers and consumers in need of high-level financial advice.